Shanghai Composite rallies on rumored property market incentives from Beijing
The Chinese benchmark saw another surge in afternoon trade on speculation that Beijing would make mortgage interest payments tax deductible in order to stimulate China's property market,
The Shanghai Composite closed 80 points, or 2.3 percent, higher at 3,537, boosted by a surge in blue-chip shares; the smaller Shenzhen Composite and tech-heavy Chinext saw losses of 0.4 and 2 percent, respectively, while the blue-chip heavy CSI 300 Index was up 3.61 percent.
Property stocks made strong gains both on the mainland and in Hong Kong. Shares in Vanke and Poly Real Estate closed 10 percent higher; shares in China Resources Land and Longfor Properties, listed on the Hong Kong Stock Exchange, were up 3.3 and 1.84 percent.
Chinese brokerages and banks also rallied strongly on the back of the reports in Chinese media of tax-deductible interest payments - Citic Securities was up 6 percent, Haitong Securities up 5.16 percent, and Huatai Securities up 6.12 percent. More generally, banking stocks traded between 3.5 and 5 percent higher.
Chinese energy plays also gained, despite a fall in oil prices. In Asian trade, U.S. WTI crude price was down 22 cents, or 0.53 percent, to $41.63 a barrel while the internationally traded Brent was 18 cents, or 0.41 percent, lower at $44.27 a barrel.
Away from the mainland, the Hang Seng Index closed 0.44 percent higher at 22,479.
Shares in HSBC were up 0.4 percent and Standard Chartered down 0.7 percent.
The banks were part of a stress test conducted by the Bank of England to measure the readiness of seven banks to deal with a severe financial meltdown in Chinese and Hong Kong markets. Both banks passed the test but Standard Chartered was the weakest among the seven.
Gaming stocks in Hong Kong were mostly up in the afternoon, but shares in Wynn Macau remained in the red, closing down 0.3 percent. On Tuesday, Macau, which is one of the premier destinations for casinos and gaming in the region, reported that November gaming revenue fell 32 percent on-year to $2.1 billion, the 18th consecutive month of decline.
Elsewhere, a non-executive director at pharmaceutical company Sihuan Pharmaceutical was arrested by Hong Kong's Independent Commission Against Corruption and subsequently released without charge. Trading in the company's shares was halted during the morning session.